A new crypto-lending platform by the name of Tokenet is set to operate as it anticipates a wave of institutional clients following the possible approval of a spot Bitcoin (BTC) exchange traded fund (ETF) in United States.
The platform was established by a group of executives who were previously part of the financial services company Cantor Fitzgerald, and have recently become part of a new brokerage firm known as Digital Prime Technologies.
Tokenet stated in a November 7 statement that it will provide firms with the ability to borrow and lend digital assets while overseeing collateral positions. Additionally, the platform will offer risk management tools which enable institutions to minimize counterparty risks similar to traditional finance practices. Tokenet is already backed by several crypto firms including Hidden Road Partners, Xapo Bank, EDX Clearing and DV Chain.
James Runnels, the co-founder and CEO of Digital Prime Technologies, expressed his excitement over Tokenet’s launch amid the current markets and regulatory obstacles, deeming it as an important step towards establishing trust and transparency in digital asset lending.
Tokenet joins a list of developing companies that are looking to embrace crypto lending, particularly in the wake of the failures of lenders such as Voyager Digital, Celsius Network and BlockFi.
In an effort to generate more revenues, major crypto exchange platforms such as Coinbase and Binance have focused on lending offerings, ensuring investors that they have learned from the mistakes of the crypto lending disaster of 2022, which led to the bankruptcy of several high-profile firms.
The launch of Tokenet coincides with the wider enthusiasm in the crypto market over the anticipated approval of a spot Bitcoin ETF. While the approval is not guaranteed, Bloomberg ETF analysts have estimated the likelihood of approval at 90% before the start of next year.
If a spot Bitcoin ETF is indeed approved, lending firms like Tokenet are poised to benefit from the surge of institutions looking to borrow Bitcoin.
Runnels, who previously held a managing director position at Cantor Fitzgerald, is leading this new venture, while Bob Sherry, the COO of Digital Prime Technologies, was previously the COO of Prime Services at Cantor until 2018.